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Investing.com -- Beyond Meat Inc (NASDAQ:BYND) stock fell 8% in premarket trading Friday after the plant-based meat company announced the initial conversion rate for its 7.00% Convertible Senior Secured Second Lien PIK Toggle Notes due 2030.
The company set the conversion rate at 572.7784 shares per $1,000 principal amount, representing a conversion price of approximately $1.75 per share. This comes after Beyond Meat recently issued over 317.8 million shares in connection with its exchange offer for 0% Convertible Senior Notes due 2027 that expired on October 28.
The announcement reveals that up to approximately 120 million additional shares may be issuable upon conversion of the 2030 Convertible Notes at the base conversion rate following stockholder approval, which is expected to be sought at a special meeting scheduled for November 19. This potential dilution appears to be weighing on the stock price.
Prior to obtaining stockholder approval, Beyond Meat will only be permitted to satisfy its conversion obligations in cash. After approval, the company will have flexibility to settle conversions with shares of common stock.
The company also disclosed a make-whole table for the 2030 Convertible Notes, detailing additional shares of common stock to be added to the conversion rate in connection with a Make-Whole Fundamental Change based on hypothetical stock prices and effective dates.
Beyond Meat has been working to restructure its debt amid ongoing challenges in the plant-based meat category, which has seen slowing growth after initial consumer enthusiasm.
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